Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Cash Dividend Payments

During 2015, 2014 and 2013, the Company did not declare or pay any cash dividends. The Company’s ability to pay dividends to holders of its common stock is limited by the Company’s senior credit facility, the indentures governing its senior notes and its vehicle financing programs.

Share Repurchases

The Company’s Board of Directors has authorized the repurchase of up to $885 million of its common stock under a plan originally approved in 2013 and subsequently expanded in 2014 and 2015. During 2015, 2014 and 2013, the Company repurchased approximately 16.1 million shares of common stock at a cost of $745 million under the program. As of December 31, 2015, approximately $140 million of authorization remained available to repurchase common stock under this plan. In January 2016, the Board of Directors authorized a $300 million increase in the Company’s share repurchase program.

Convertible Note Hedge and Warrants

In October 2009, the Company issued 3½% Convertible Senior Notes due October 2014. Concurrent with the issuance of the Convertible Notes, the Company purchased a convertible note hedge for approximately $95 million, to potentially reduce the net number of shares required to be issued upon conversion of the Convertible Notes, and issued warrants for approximately $62 million to offset the cost of the convertible note hedge.

The convertible note hedge and warrants, which were to be net-share settled, initially covered the purchase and issuance, respectively, of approximately 21.2 million shares of common stock, subject to customary anti-dilution provisions. The initial strike price per share of the convertible note hedge and warrants was $16.25 and $22.50, respectively. The convertible note hedge was exercisable before expiration only to the extent that corresponding amounts of the Convertible Notes were exercised. The convertible note hedge and warrant transactions were accounted for as capital transactions and included as a component of stockholders’ equity.

In October 2014, the $66 million of outstanding Convertible Notes converted into approximately 4.0 million shares of the Company’s common stock at the initial conversion rate of 61.5385 shares of common stock per $1,000 principal amount.

During 2013, along with the Company’s repurchase of a portion of its Convertible Notes, the Company repurchased warrants for the purchase of the Company’s common stock for $37 million and sold an equal portion of its convertible note hedge for $50 million, reducing the number of shares related to each of the hedge and warrant by approximately 13 million. In addition, the Company unwound the remaining outstanding convertible note hedge and warrants, repurchasing warrants for the purchase of the Company’s common stock for $41 million, and settling its convertible note hedge for proceeds of $54 million and 179,000 shares of the Company’s common stock valued at $7 million.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

	Currency Translation  Adjustments			Net Unrealized Gains (Losses) on Cash Flow Hedges (a)			Net Unrealized Gains (Losses) on Available-For-Sale Securities			Minimum Pension Liability  Adjustment (b)			Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2013	$	193		$	—		$	2		$	(85	)	$	110
Other comprehensive income (loss) before reclassifications	(27		)	1			—			24			(2		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			—			—			9			9
Net current-period other comprehensive income (loss)	(27		)	1			—			33			7
Balance, December 31, 2013	166			1			2			(52		)	117
Other comprehensive income (loss) before reclassifications	(115		)	(7		)	—			(24		)	(146		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			5			—			2			7
Net current-period other comprehensive income (loss)	(115		)	(2		)	—			(22		)	(139		)
Balance, December 31, 2014	51			(1		)	2			(74		)	(22		)
Other comprehensive income (loss) before reclassifications	(131		)	(6		)	(2		)	6			(133		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			5			—			3			8
Net current-period other comprehensive income (loss)	(131		)	(1		)	(2		)	9			(125		)
Balance, December 31, 2015	$	(80	)	$	(2	)	$	—		$	(65	)	$	(147	)

__________

All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries and include a $69 million gain, net of tax, related to the Company’s hedge of its investment in Euro-denominated foreign operations (See Note 18-Financial Instruments).

^(a)  For the years ended December 31, 2015 and 2014, amounts reclassified from accumulated other comprehensive income (loss) into interest expense were $7 million ($4 million, net of tax) and $8 million ($5 million, net of tax), respectively. For the year ended December 31, 2015, the amount reclassified from accumulated comprehensive income (loss) into vehicle interest expense was $1 million ($1 million, net of tax).

^(b)  For the years ended December 31, 2015, 2014 and 2013, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses and operating expenses were $5 million ($3 million, net of tax), $3 million ($2 million, net of tax) and $15 million ($9 million, net of tax), respectively.

Agreement with Shareholder

In January 2016, the Company entered into an agreement with SRS Investment Management LLC and certain of its affiliates pursuant to which the Company increased the size of its Board to twelve directors and appointed an SRS investment professional to the Board. The Company has also agreed to increase the size of its Board by one additional director and to appoint a reasonably acceptable independent director recommended by SRS. The Company will include the SRS investment professional and the additional director recommended by SRS in its slate of nominees for election as directors at the Company’s 2016 annual meeting of stockholders. The SRS investment professional will be appointed to the Compensation Committee of the Board.